The seven year cumulation period In the TYU above, the individual had made no previous lifetime gifts andtherefore all of the NRB was available to calculate the tax. However, theNRB is available for a 'seven year cumulation period'. Each time a CLT is made, in order to calculate the IHT liability, it isnecessary to look back seven years and calculate how much NRB isavailable to set against that particular gift. For lifetime calculations, to calculate the NRB available at any point in time,it is necessary to take account of the total of the gross amounts of all other CLTs made within the previous seven years. • These CLTs in the seven year cumulation period are deemed to haveutilised the NRB first.• There will therefore only be NRB available to match against this latestgift if the total of the CLTs in the previous seven years is less than theNRB at the time of the gift.• Note that although PETs may use the AE during the donor's lifetime,they do not affect the NRB available as they are not yet chargeable.

Summary of lifetime calculations Remember to: • only calculate IHT on CLTs• consider the IHT position for each CLT separately and in chronologicalorder• use the NRB applicable for the tax year of the gift• tax is due at 20% if the trustees pay, and 25% if the donor pays.Also remember that PETs are not chargeable at this stage, but may use theannual exemptions. 8 IHT payable on lifetime gifts as a result of death On the death of an individual, an IHT charge could arise in relation to lifetimegifts within seven years of death as follows: • PETs become chargeable for the first time.• Additional tax may be due on a CLT.The IHT payable on lifetime gifts as a result of death is always paid by therecipient of the gift: Type of gift: Paid by:CLT Trustees of the trustPET Donee